Synergy of personalization and segmentation

Our research repeatedly confirms that creating the right content for the right group of recipients is the key to a successful email marketing campaign.

The two most important factors in making this strategy possible are closely related - personalization and segmentation. Together they have a major influence on the effectiveness of any campaign and its profitability.

A task for marketers

We as marketers have an important role to play in this process of finding just the right message for each subscriber. The fact is that while we all have access to these tools, not everyone uses them to their full or potential and sometimes they are not used at all.

After all, we are the ones who are responsible for creating newsletters, sending them, analyzing reports and managing the data we get from them.

Start with segmentation

Segmentation gives you options when managing your subscriber database. It lets you create groups and subgroups of newsletter recipients that have common characteristics and are more receptive to content of a certain kind.

In practice, this means arranging your database according to information about your subscribers that you have gathered from previous campaigns. Marketers typically segment their databases according to:

• declared data given when subscribers first sign up for a newsletter like name, age, location, etc.
• behavioral data regarding actions taken by subscribers like which messages they have opened, which links they have clicked and their transaction histories
• loyalty, as measured by the portion of your messages they have opened. You might, for example, create a group of “active” customers who open at least 75% of your messages, another group who opens them less often and a group of “sleepers” who almost never open them.

RFM analysis - a great way to segment your database

One of the more interesting methods you can use to segment your database is an RFM analysis. It lets you create groups according to when subscribers made their last purchase, how frequently they make purchases and how much they spend. Using the results from an RFM analysis, you can then create dedicated content aimed at these different groups without the need to construct completely different projects. It’s enough to create one and then use dynamic content to adapt to various recipients.

Our own Strategy Department at FreshMail used RFM analysis for one of our clients, which calls itself “the most feminine store on the internet”. As part of our mission to increase sales and enhance customer loyalty, we started by dividing the customer base into three parts. The first group consisted of active users and they received content featuring fashion-related topics and visuals. Another group made up of subscribers that hadn’t made a purchase in six months received a 15% discount on their purchases and a final group who hadn’t made a purchase in more than a year got a 30% discount. The promotion ended up with an increase in sales of 35%.

Different ways to aim at your target

Recognize that segmentation can allow you to target subscribers in a certain geographical area. The same concept can let you create a segment based on gender and create campaigns around gender-specific holidays and occasions. 

Are you seeing the possibilities here? Segmentation can also help you to dramatically reduce the number of unsubscribes and resignations from your mailing list. Many of them are caused by the disappointment and dissatisfaction felt by subscribers when they get the impression that the same message has been sent to everyone without regard for their tastes or preferences. Making segments based on subscriber loyalty can be the cure for this problem since you will be able to distinguish between those who regularly open your messages and those who don’t. 

Personalization - the king of marketing!

If segmentation is one side of the coin of email marketing success, then personalization is the other side. Personalization is all about doing what you can to make sure that each subscriber receives content that matches their likes and preferences as much as possible.

Personalization is all about appealing directly to the customer. If all you have is their name - obtained in the sign-up process or at some point in a previous interaction - an advanced email marketing strategy will use the information in every way possible to increase the chances that your message gets read.

Remember, however, that frequent use of the name in the title can cause your recipients to get too get used to it or, worse, feel irritated and unsubscribe from your database. Don’t depend on just the use of the name alone and make sure that your message titles are engaging and that your messages are associated with content matched to customer expectations.

Our ability to personalize extends beyond the message title to the content of the message itself. Dynamic content enables newsletters to automatically display selected content to match defined criteria. This means a single campaign can deliver multiple messages to different subscribers, increasing the chances that this personalized content will result in greater engagement and more conversions.

Example of the use of segmentation and personalization 

So let’s look at how these ideas can work in the real world.

Let’s say that you run a bookstore and recently decided to start selling online. You obviously want to increase sales and are thinking about how email marketing can help you get it done. Your first thought is to send a newsletter to book lovers since you have some addresses and they have consented to receive emails from you.

At last, you decide to take the traditional method of using a picture of the book cover along with an brief description. But how can you add something to this strategy using current trends? Isn’t there a downside to sending the same newsletter featuring the same books to everyone? Of course there is. Books are an excellent example of how lots of people like a certain product (books in general) but have different tastes and preferences (travel books, cook books, biographies and a million other kinds).

Personalization and dynamic content let each subscriber see a message that matches his preferences and impacts your bottom line by matching customers to the products that they are most likely to be interested in. 

The fact is that implementing segmentation and personalization strategies takes time and patience and I can’t guarantee you won’t get a little frustrated before you get the formula just right. Making all of your subscribers feel like you are doing everything possible to tailor your offer to suit them is not easy. However, there is no question that watching what you subscribers do and noting how they react to different aspects of your newsletter is the most important key to success.

Always look over all the data you get from your campaigns and keep an eye open for opportunities to experiment and find new and better ways to deliver the most highly personalized messages possible. Just watch your sales and conversions - they will tell you when you’ve got it right.

Questions? Comments? We’re always standing by to help!